In my last post, I commented about a few "mega developments", and how they all related to some aspect of "play", such as Las Vegas-style gambling or a mega amusement park for the ultra-rich. Apparently, these activities throw off a lot of cash for the owner, justifying the initial investment in the projects.
So, are there less luxurious justifications for significant developments?
Just so we're straight, every development is significant in some way, but I'm referring to landmark, sweeping, game-changing development.
All along, I've advocated some types of development that aren't your typical suburban development - projects that exist to satisfy some societal need, be it community, culture, health, environmental responsibility. (As a reminder, you can read more about that here.) However, to the investment community, these are not adequate justifications for developing real estate. Needless to say, the project will only be successful with the investment.
As I, or any other developer, work through the vision of a development, the financials are often forefront of the planning process. Unless I can answer the question of how an investor in a project can receive their money back with interest, the project will never get off the ground. In a circular way, this should explain why a Vegas-style casino may get funded, while a community-sensitive, well-planned mixed-use project may not.
Rest assured, projects that promote Community, Culture, AND Commerce can be funded and built. It simply means I, and my other fellow developers, just need to be more diligent.
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